Practically Speaking
Summer 2024 Updates

Dr. Kai Yeung, PharmD, PhD, has emerged as a distinguished figure in the realm of managed care pharmacy, notably for his work on value-based formularies. His recent accolades, supported by the Donaghue Foundation, highlight his contributions to improving prescription drug affordability and health outcomes. Dr. Yeung’s research focuses on innovative strategies to optimize drug benefit designs, ensuring they align with cost-effectiveness principles to deliver high value to patients and health plans.

Dr. Yeung was recently honored with the JMCP Award for Excellence for the best article in the Journal of Managed Care & Specialty Pharmacy (JMCP) in 2023. This award celebrates his final first-authored publication during his tenure at Kaiser Permanente Washington Health Research Institute. The award-winning article, co-authored with Maricela Cruz, Emily Tsiao, John Watkins, and Sean Sullivan, evaluates the impact of a value-based formulary (VBF-e) on drug use, patient out-of-pocket costs, and health plan spending.

The study, titled “Drug use and spending under a formulary informed by cost-effectiveness,” demonstrated that the VBF-e significantly reduced the use of low-value drugs while increasing the use of high-value specialty medications. The findings showed a reduction in health plan spending by $14 per member per month and a marginal increase in member out-of-pocket costs by $1 per month without increasing other healthcare services like emergency visits or hospital stays. (abstract)

Dr. Yeung’s research delves into the intricacies of value-based formulary design. His work has addressed pressing issues such as the growing expenditure on specialty drugs and the affordability of high-priced generics. The value-based formulary essentials (VBF-e) model, which he helped develop, utilizes cost-effectiveness evidence to inform drug coverage and cost-sharing decisions. This approach aims to balance drug affordability with access to high-value treatments, particularly for specialty medications that account for a significant portion of drug spending despite representing a small percentage of prescriptions.

In his interview, Dr. Yeung highlighted the evolving role of value-based care in managed care pharmacy, emphasizing the need for robust evidence to support therapeutic advancements and ensure cost-effectiveness in drug benefit designs. His collaboration with Premera Blue Cross has been pivotal, fostering trust and enabling unbiased research that informs the implementation and propagation of the VBF-e model.

Looking ahead, Dr. Yeung sees a critical need for research and innovation in managed care pharmacy, especially concerning the increasing prevalence of gene therapies. These treatments, while promising, come with high costs and limited long-term evidence. He advocates for strategies that ensure access to these therapies while maintaining the affordability of pharmacy benefits.

Dr. Yeung’s Donaghue-funded research project, “Value-based Formulary-Essentials: Testing and Expanding on Value in Prescription Drug Benefit Design,” has significantly influenced his current projects at Amazon Health Services. His ongoing work continues to explore innovative ways to apply cost-effectiveness data to drug pricing and benefit design, aiming to enhance patient health outcomes and ensure equitable access to necessary medications.

His dedication to advancing value-based care and his recent achievements underscore his significant contributions to managed care pharmacy. His research provides a framework for more sustainable drug benefit designs and paves the way for future innovations— prioritizing cost efficiency and patient well-being. Congratulations Dr. Yeung!

*The Foundation reached out to Dr. Yeung for an e-interview to gain his insight on his recent accomplishments.